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Kirby v. Tad Resources International6/16/2004
Plaintiff was denied long-term disability benefits under her employer's group insurance policy. The gut issue is whether, under ERISA, she can seek judgment against the ERISA plan itself as an entity when the disability insurer in control of administration of the plan has been dismissed on res judicata grounds and is not a party and Plaintiff cannot directly obtain a judgment against the insurer. The district court held she could not. We reverse.
BACKGROUND
Plaintiff Stella Kirby sought damages stemming from the denial by Guardian Life Insurance Company of America (Guardian) of her claim for long-term disability benefits under a group insurance policy purchased by her employer TAD Resources International, Inc., whose successor-in-interest is Adecco SA (collectively referred to as Employer). Plaintiff had received disability benefit payments for about one year, after which payments ceased. Her initial complaint, filed in April 1999, named Guardian and Employer and asserted seven counts under state law for breach of the covenant of good faith and fair dealing, intentional infliction of emotional distress, fraud, negligent misrepresentation, unreasonable delay, violations of the Unfair Insurance Practices Act, and violations of the Unfair Practices Act.
Before any responsive pleading was filed, Plaintiff filed an amended complaint that varied from the original complaint only by the addition of some minor language and by reordering some of the counts. Guardian filed a motion to dismiss the amended complaint on the ground Plaintiff's state law claims were preempted by the Employment Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 to 1461 (1974, as amended through 2004) (ERISA). The district court dismissed the amended complaint on preemption grounds, but granted Plaintiff fifteen days to file a second amended complaint seeking recovery under ERISA. We refer to the court's order of dismissal of the amended complaint as "the preemption order of dismissal" as we proceed through the procedural morass that followed.
Plaintiff filed a second amended complaint in December 1999, in which she kept Employer as a defendant but dropped Guardian as a defendant. The structure of the second amended complaint was different than that of the first in that, in attempted compliance with the preemption order of dismissal, the second amended complaint alleged that the action was brought "in part" under provisions of ERISA and asserted a claim for failure to pay benefits. However, the second amended complaint also asserted state law claims for fraud and negligent misrepresentation based on allegations that Employer erroneously misled Plaintiff into believing that her medical insurance would continue as a converted policy if she paid Employer a premium for the coverage.
Nearly a year after Plaintiff filed the second amended complaint, the district court granted Plaintiff's attorney's motion to withdraw as counsel based on irreconcilable differences. Thereafter, Plaintiff's new attorney and Employer's attorney filed a stipulation indicating that Plaintiff would file a third amended complaint based on ERISA. Based on the stipulation, the district court entered an order dismissing the second amended complaint without prejudice and ordering Plaintiff to file a third amended complaint.
Plaintiff's third amended complaint, filed in March 2001, asserted, as her sole claim, a claim under 29 U.S.C. § 1132(a)(1)(B) for wrongful denial of benefits. The third amended complaint continued to name Employer as a defendant, but also added the disability plan, naming Long-Term Disability Plan of Tad Resources International, Inc. (the Plan) as a separate d
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